The Large Cap Core Fund posted a total return of 4.29% for the quarter, compared with 5.23% for the Funds benchmark, the S&P 500® Index. The Funds underperformance primarily was due to stock selection in the consumer discretionary, financials and energy sectors. Stock selection within the industrials and materials sectors added to performance.
Investors generally revised downward their economic growth projections for the first half of 2014, taking the first quarters weather disruptions into account. We believe stronger spending and manufacturing should create a favorable environment for stocks during the rest of the year. In addition, its unlikely any major legislation will pass before Novembers mid-term elections. Overall, investors remain concerned about slowdowns in the larger emerging markets, particularly China, and the impact of higher taxes in 2014.
We believe the outlook for risk-taking will continue to improve on better economic data. We believe the Fund is well-positioned as investors move beyond the broad economic data and refocus on company fundamentals.
If you're seeking a low cost, disciplined approach to investing in equities, this fund may be appropriate for you. It seeks long term growth of capital and dividend income and invests primarily in a broadly diversified portfolio of established, large-cap companies. The Fund is intended for use as a core equity investment.
- Use a multi-factor proprietary quantitative stock selection model with the goal of providing additional total return versus the S&P 500® Index.
- Create a portfolio with risk, style, capitalization and characteristics similar to the S&P 500® Index while potentially providing excess returns by overweighting or underweighting stocks that have the potential to achieve the Fund's objective.
- Sell securities when they are no longer attractive based upon evaluation criteria, such as valuation, price momentum and earnings quality.